The value of a bitcoin surpassed $100,000 for the first time, boosted by US President-elect Donald Trump’s nomination of cryptocurrency advocate Paul Atkins to chair the Securities and Exchange Commission. The crypto community believes that Atkins’ appointment would mark a major shift in the way the United States regulates the space, moving away from the enforcement actions taken by Gary Gensler.
Since the start of the post-election rally of cryptocurrencies, bitcoin is expected to cross this threshold, especially as its price has more than doubled in 2024. This could spark even more buying interest in an already feverish market . “From a technical point of view, the $100,000 level represents an important and symbolic resistance, the break of which could attract new capital, in particular due to the renewed confidence of long-term investors,” explains Stefano Bargiacchi, analyst at Directa SIM.
Bitcoin is in a price discovery phase
Surpassing $100,000 could be a technical “sell” signal for some. “This stage also represents an important psychological level, since it is a relevant profit-taking threshold for those who invested five or ten years ago,” explains Ferdinando Ametrano, managing director of CheckSig and professor of Bitcoin and Blockchain technology in Milan-Bicocca. University. But he adds that market sentiment will likely remain buoyant: “Bitcoin is in a phase of price discovery above previous all-time highs – uncharted territory that is attracting attention and speculation. »
Bargiacchi agrees, saying this step could give long-term investors the confidence to sustain further gains: “Rather than an immediate correction, breaking through the key level could trigger a new phase of an uptrend, with the price driven by optimism and price discovery momentum. »
Spot ETF Bitcoin: a turning point
The groundwork for bitcoin’s 2024 boom was laid in January, when the SEC approved the sale of exchange-traded funds tied to bitcoin’s spot price. Before this, many believed that the collapse of FTX strengthened the case for stricter crypto regulation. In November 2023, FTX founder Sam Bankman-Fried was convicted of fraud and conspiracy, and he was sentenced to 25 years in prison in March 2024.
John Plassard, senior investment specialist at Mirabaud Group, says that since the SEC decision, institutional investors are increasingly adopting bitcoin, helped by investment products like ETFs: “The entry of large asset managers Assets such as BlackRock BLK and Fidelity FNF have further legitimized bitcoin as a portfolio asset. In the future, institutions are likely to deepen their involvement as regulation improves, viewing bitcoin as a hedge against inflation and economic uncertainty. However, risk management will remain a priority, given historical volatility.
Crypto Investors: Prepare for Volatility
Cryptocurrencies are known for their high volatility. Prices can fluctuate significantly over short periods of time, driven by market sentiment, regulatory news, technological developments and macroeconomic trends.
“Investors should approach Bitcoin investing with the understanding that volatility is an inherent characteristic. This means preparing for potentially substantial price corrections and declines in value, regardless of current conditions,” says Dovile Silenskyte, director of digital assets research at WisdomTree. “Investors must also recognize that volatility can cut both ways. While this presents the possibility of substantial upside gains, it also carries the risk of significant losses.”
So, how should investors interested in bitcoin or other cryptocurrencies behave? “The first tip is to clearly define the time horizon and understand how cryptocurrencies work, as well as the risks associated with them,” says Bargiacchi. “A systematic approach, such as one based on accumulation plans (like monthly payments), can help mitigate volatility, avoiding the often unsuccessful attempts to time the market.” According to him, it is also essential to invest only part of the capital that one is prepared to lose, without using funds intended for current expenses or emergencies.
